Block Rises on Outlook in After-Hours Trading
By Maria Armental
Block Inc. shares rose 8.6% to $103.75 after hours Thursday as investors focused on its outlook and as company officials said that they hadn’t seen a decline in consumer spending.
Block officials said that they still expect Cash App and Square to sequentially grow gross profit each quarter this year, excluding “buy now, pay later” platform Afterpay, which Block bought this year.
Block’s gross profit margin in the March quarter widened to 32.7% from 19.1% a year earlier.
Overall, however, Block swung to a first-quarter net loss of $204.2 million, or 38 cents a share, compared with a year-earlier profit of $39 million, or 8 cents a share. On an adjusted basis, profit fell to 18 cents a share.
The most recent quarter’s results included expenses tied to the Afterpay acquisition. Excluding those items, Block said the net loss would have been $114 million.
Net revenue fell to $3.96 billion from $5.06 billion a year earlier, driven by a decrease in bitcoin revenue. Excluding bitcoin, net revenue was $2.23 billion, up 44% from the year earlier, Block said.
Analysts surveyed by FactSet had expected a loss of 17 cents a share, or adjusted profit of 20 cents a share, and about $4.14 billion in revenue.
Block said the bitcoin revenue decline was primarily driven by relative stability in the price of bitcoin during the quarter, which it said reduced customer demand and trading activity compared with the comparable period a year earlier.
Block had invested $220 million in bitcoin as of Dec. 31, 2021, with no additional investments in the March quarter, it said.
As of March 31, the so-called fair value of Block’s bitcoin investment was about $366 million, which the company said was about $217 more than the investment’s carrying value, or book value.
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